Mountain Sports Inc. recently issued $2-$year bonds paying $10\mathrm{.}5\%$ per year. The real risk$-$free rate of return is $2\%,$ inflation is expected to be $1\%$ the first year and $4\%$ the second year, and the MRP is $1\%.$

$($a$)$ What is the inflation premium on this bond? $2\mathrm{.}5\%$

$($b$)$ What is the default risk premium on this bond? $5\mathrm{.}0\%$

$($c$)$ What should the rate on $3-$month Treasury bills be$?$